NZDUSD is echoing a dominating bearish tone as the vital resistance section of 0.6992-0.7010 (previous support-now-resistance) is curbing efforts of a greater positive pullback off 0.6942, which reflects a four-month low. The pair is now consolidating in the vicinity of the red Tenkan-sen line, while the falling simple moving averages (SMAs) are feeding the negative picture.
The flattening blue Kijun-sen line is reflecting the pause in the downwards price move, while the short-term oscillators are conveying mixed signals in directional momentum. The MACD and the stochastic oscillator are both endorsing bullish sentiment. The former, is far below its zero level although is rising above its red trigger line, while the latter’s climbing %K line, has pierced into overbought territory. On the contrary, the RSI, which is struggling to progress in the bearish zone, is indicating waning in positive momentum.
Should the directly overhead resistance of 0.6992-0.7010 continue to cap gains, initial downside friction could come from the red Tenkan-sen line at 0.6962 ahead of the nearby low of 0.6942. If the pair resumes the decline, sellers may encounter downside constrictions from the region of 0.6875-0.6896. In the event the price sinks even further, subsequent tough support could emerge from the boundary of 0.6794-0.6809.
Alternatively, if buyers overtake the heavy border of 0.6992-0.7010, initial resistance may occur at the 0.7029 barrier before the bulls hit the blue Kijun-sen line at 0.7061. Next, the buffer zone of 0.7082-0.7105 could prove to be a difficult obstacle to overcome. However, if buyers conquer the Ichimoku cloud and the 100-period SMA, encapsulated in the resistance band of 0.7130-0.7149, this could be a tipping point for the bulls to regain control.
Concluding, NZDUSD is looking increasingly bearish. Yet, a break above the restrictive trend line and the 0.7180 high would be required to re-instil belief in a positive outcome.
